I outline the key data points and takeaways further down in this post.

But the real story is the insights the report gives us into winning players and strategies (that is, who will be selling the most and how).

APP DISTRIBUTION AND APP STORE PROLIFERATION

Chetan documents a real and gradual shift from on-deck stores (translated: mobile operator offerings) to off-deck plays that are primarily DD2C (Developer Direct 2 Consumer) – potentially the toughest kind of sales pitch for developers more adept in tech than marketing.

Indeed, developers are going to need some help with that. Little wonder that Patrick Mork, GetJar VP Marketing, singles out app payment and in-app advertising and reveals these are the next features/functionality in the GetJar pipeline. (Smart! It’s all about making it easier for developers to make money from their apps).

And then there are the regional differences that Chetan has expertly uncovered.

Particularly in emerging markets, the mobile apps- mobile advertising business ecosystem has become robust enough to provide developers added revenue. It’s a big business if we consider that Asia, with the lowest pre-paid subscriber rates, also accounted for 37 percent of global downloads.

Overall, Chetan estimates advertising based revenue accounted for about 12 percent of the overall revenue, but that figure is projected to rise to 28 percent by 2012.

Finally, the report confirms two observations that run through my own research and writing like a leit motif: the business imperative to improve content discovery and the potential for a Long Tail of app stores (not just an “app for that” – but an app store for that!).

Farmers Markets and Supermarkets? I’ll have more on that scenario later this week when I catch up with Mike Lurye, Director, Product Marketing, Amdocs Interactive, to explore the characteristics (choice, convenience, payment, personalization) that can potentially separate the leaders from the also-rans.

GETJAR PODCAST

But first the highlights from my podcast with GetJar’s Patrick Mork, who was instrumental in guiding the research project from the start. We discussed the report numbers that really stand out and the business model strategies they support.

HYPERLOCAL: Developers will need to adapt their business models to the regions. Direct sale of apps in developing markets versus ad-supported schemes in emerging markets. This divide spells fantastic opportunities in mobile advertising for companies that can tap them. (One reason why GetJar is gearing up to launch a partnership with a major advertising company to enable this scenario everywhere.)

THERE CAN BE ONLY A FEW?: GetJar CEO Ilja Laurs is bullish about the outlook for a fortunate few stores that have the right capabilities mix (GetJar among them. Of course). In his view: “There is no way that this many app stores will survive in the long term and while the value of the global app economy is set to be astoundingly high by 2012, we think only a few app stores will share this revenue.” Why? Patrick puts it down to the virtual nature of commerce in an app store. “In a virtual economy such as the app economy retail is different and you don’t need that many players.” The selling point is relevant content and app stores that have this – and consumer traffic – are in the winners’ circle. Another reason why only a few may survive: “Developers have finite resources…. They are resource-starved and will therefore only work with a few app stores because they won’t have the time or energy to work with many of them.” (After all, he adds, it can be a pain and drain to open accounts with multiple stores, connect to the back-end systems and upload the content. “Our value proposition continues to be that GetJar is a one-stop to upload it in one place.)

APP SHORTCUTS PAY-OFF: Patrick and I finally got the chance to discuss the runaway success of app shortcuts, literally shortcuts to mobile websites. Put simply, brands and content companies can promote their mobile website as if it was an app(!) Before you dismiss it, consider this: Facebook counts a whopping 45 million downloads of site shortcuts via GetJar. That number beats their iPhone app downloads by a mile!

Listen to the podcast here. [15:32]

My take: The app economy has officially arrived. In 2009, app downloads worldwide were approx. 7 billion with Asia accounting for a whopping 37 percent of the total. Total downloads are forecast to skyrocket to almost 50 billion in 2012 – a year on year growth rate of 92 percent. This would mean that the value of apps sold would be greater than the value of CDs sold in 2012 ($13.83 billion). But we shouldn’t break out the champagne just yet. The business models are unclear, the market is fragmented and real success is linked inextricably to local and regional market conditions. The hard truth: It’s not a single market and one-size-fits all app schemes won’t deliver. Will app stores be on-deck (operator managed) or off-deck (direct-2-consumer)? Or will there be hybrids? Will the prevailing model be paid apps or ad-supported apps? Or will it be a mix? I’m not avoiding the question when I say ‘all of the above’ and everything in-between. Chetan’s report paints a buoyant picture of a young market (“the proliferation of apps in many directions”) and hints at the key capabilities that will clinch the deal for app stores and there developers.

The bottom line: We need more engaging and creative approaches to mobile advertising in those markets where this model will rule (emerging markets). And we need the various channels of mobile advertising (messaging, Web, search and coupons/barcodes) to work together more tightly. Finally, content discovery is an issue the industry must recognize and solve.

In closing a positive – and possible –scenario (from Chetan) if we get this right: “Connectivity breeds apps. It is a given that as consumer electronic devices become wirelessly connected, consumers are looking to download apps on those platforms. Apps download on the iPod have been every bit of a success as they have been on the iPhone. Similarly, we will see a significant uptick in the apps for devices such as the iPad, telematics platforms in vehicles, digital cameras, navigation devices, picture frames, weight scales, and the list goes on and on. These apps will entertain and amuse consumers, analyze data on the devices, connect users with content and friends, and will interconnect various end-points in the pervasive mobile ecosystem in a much more profound manner.” It’s shaping up to be a great space indeed!

Last year was one company milestone after another: Nimbuzz updated the app on iPhone, released a version for Blackberry, introduced VoIP for Android and launched Twitter for Symbian handsets. It also sealed deals to be pre-installed on the T-mobile Tap Phone in the U.S. and on the Toshiba TG01 handset offered by O2 in Germany.

To connect the dots in last year’s accomplishments and get the inside track on Nimbuzz’ next moves I caught up with Tobias Kemper, VP of Nimbuzz Inc. USA. Many thanks to Tobias for a straightforward interview and unexpected insights into the product roadmap.By way of background, Nimbuzz – winners of the Techcrunch, Webby and Red Herring awards – counts over 14 million users in 200 countries, a number growing at around 40,000 new users per day (that’s 1 every 2 seconds). It counts over one million voice calls per day (over 300 million per year).

Other podcast highlights:

PLATFORM STATS: Nimbuzz supports all the usual suspects: Symbian, J2ME, Android, iPhone, iPod touch, Windows Mobile and RIM. So what flies? “Symbian is definitely our number one, directly followed by Java and the iPhone.  We’ve only just launched a native RIM client with massive uptake….The iPhone has definitely done a tremendous amount and continues to, but Symbian is the most dominant player.”

USAGE & BEHAVIOR: There are distinct and interesting differences depending on the geography. “In the Middle East, for example, people use our products like nothing else to meet people [and] enter the chat rooms. They treat those like mini-social networks, so it’s really going beyond the technology of just making a free call….In the developed countries — Western Europe and North America — it’s all about being able to monitor your friends, having everyone in the same place, reading everyone’s status messages and being able to tap in and say ‘OK I want to get in contact with this person right now.’”

BUSINESS MODELS: Mobile marketing and advertising are candidates, but mobile CRM is highest on the radar. Even better if it involves brands. As Tobias put it: “A mobile social messaging application like ours is perfectly positioned to foster brand engagement.  It is something that we’re looking at because it’s an always on product, it’s a very intimate device that the product is based on and it is something that we are going to be exploring more in the next year.  It definitely makes sense, it has to be done right and it has to be with the user focus.”

NEW FEATURES IN THE PIPELINE: Look for some surprises and more mobile operator partnerships. Again, Tobias is understandably reserved. What we know: “There’ll be a whole bunch of features that are going to be built on top of location-based services that are being built out and become more contextually relevant.”

My take: Hmmmm… contextual relevancy is an element of a range of exciting – and potentially lucrative –services.

So, will Nimbuzz join the group of hot mobile location-sharing services that includes Foursquare, Gowalla, Brightkite and Loopt – to name a few?

It’s a tough one to call, but Nimbuzz could make the move.

What does Nimbuzz think? Tobias is understandably tight-lipped but his admiration for companies like Foursquare and plans to add “similar features” comes through loud and clear. As he puts it: “It’s about moving beyond the technology and doing that face-to-face meeting. [It's about] what we can do to make that easier and aid users in using that feature and making real-life interactions happen through our application.”

Communication and community are baked into the app, and a whopping 98 percent of people who use it recommend it to a friend. That keeps Nimbuzz’ marketing budget down and boosts its viral appeal. Surely those metrics lay the groundwork for a more ambitious strategy and a new ecosystem around personal recommendations of real-life places and establishments…

Listen to podcast here [15:50]

The bottom line: Finally Google reveals the terms that deliver results in mobile search. But mobile search usage is still lagging, no doubt due to a laundry-list of universal shortcomings MSearchGroove has analyzed in this recent post. The new Google Keywords Tool is good news for marketers and publishers, but another proof that mobile search as a service has a way to go. Peggy adds: Or does it simply underline the pivotal importance of content discovery – not mobile search – as a primary means to explore the wealth of content at our finger tips and find what we are likely to appreciate?

***

MORE THAN HALF OF INDIAN COLLEGE STUDENTS USE THE MOBILE WEB, says a new survey from Indian mobile ad firm InMobi, and a third of the students engage with brands that advertise online. The students’ favorite sites to visit on their mobile devices are search engines, news sites and social networks, and the company says that mobile internet usage is spread across a multitude of income groups. Source

The bottom line: More evidence pointing to the popularity of the mobile internet in emerging markets, and the ability of mobile ads to reach consumers there.

***

MOBILE APP STORE SALES WILL HIT $4.2 BILLION IN 2013 in the US alone, says a new report from the Yankee Group. It calls the sales growth, along with a quadrupling of US smartphone users to 160 million, a “gold rush”. The firm also offers some advice to developers: they say those with consumer apps should focus on BlackBerry, while enterprise developers should focus on the iPhone and Android platforms, because of the lack of those types of apps for each respective platform. They also add that pricing and marketing are important considerations for success.

The company says that one out of four downloads in 2013 will be for paid apps, and predicts an average price then of $2.37. It also puts the value of this year’s US download market at $343 million. Source

The bottom line: This is a very bullish prediction, without a doubt. The 160 million smartphone figure is pretty brazen and clearly based on the belief that most devices sold over the next four years in the US will be smartphones. The advice about choosing platforms seems a little odd, considering that to drive downloads and sales, developers may be better off going where the users they want to target are.

—–

ONE OUT OF FOUR PEOPLE INTENDING TO MAKE A PURCHASE IN MOBILE OPERATORS’ SHOPS LEAVE WITHOUT BUYING, according to a new report from Amdocs. The company says that retailers could save half of those lost sales opportunities by improving the customer experience (and, of course, Amdocs has a solution for that — you didn’t think it was just sharing this info for fun, right?). It cites the main reasons for the lost sales as an inability to get a device right away, the inability to get the “touch and feel” of a device before buying, and a lack of experts to consult about devices’ features. Source

The bottom line: The reasons Amdocs sites as barriers to purchase all ring true — and combined with the general unpleasantness of many operator retail outlets thanks to long lines, dummy devices, and other factors, it’s not hard to see why many would-be buyers end up frustrated.

***

CONSUMERS WILL DRIVE MOBILE HEALTH SERVICES FORWARD, NOT COMMERCIAL PRODUCTS, says the analyst firm Berg Insight. Remote medical monitoring and diagnostics have been hyped for quite some time, but the applications and devices have been slow to emerge. The firm suggests instead that it’s consumer applications, such as smartphone apps and networked personal medical devices, that will lead the way. Source

The bottom line: The personal, always-on, always-with-us nature of mobile devices makes them perfect for medical applications, while their growing functionality makes them ever more useful in this area. In addition, software apps promise to deliver many of the benefits of dedicated mobile hardware at a lower price to consumers.

***

65 PERCENT OF APP DOWNLOADERS ARE MALES AGED 18-34, says GetJar. This demographic is prized by many marketers, even though they often find it difficult to reach, suggesting that apps are a great way to do so. 81 percent of all downloaders were male, while almost two-thirds of them download apps 3-4 times a week. GetJar’s research also found that 72 percent of its app downloaders use the mobile internet more than the internet on PCs — and this isn’t just limited to emerging markets, with 62 percent of US GetJar users and 69 percent of UK ones agreeing. Source

The bottom line: It’s clear that GetJar has some seriously dedicated users, who could serve as a useful bellwether for the overall apps market. It’s not too surprising to see the young male dominance — but also suggests that developers and app stores may not be doing a great job of reaching other demographics.

Only a few weeks since I teamed up with Inma Martinez – a leading digital media strategist and advisor to venture capitalists who has been referred to as a “free radical” by Red Herring and Fast Company – to co-host Mobile Groove. The overwhelming positive response to our no-holds-barred monthly podcast (which speaks out on developments impacting the mobile industry/investment community at all levels) is encouraging and we are gearing up for our September podcast, a program sure to showcase the highlights of the events and exclusive interviews/briefings/chats Inma and I experience first-hand over the next weeks.

Inma has been invited to attend Mobilize in San Francisco (September 10), a conference that explores the industry vision for the future of wireless and also offers 10 cool startups a platform as part of the Launchpad. As review of these companies (which include: Pageonce, mataio, Waze, Toktumi Line2, Glympse, Ondeego, Square Connect, Locle, IQ Engines and Distimo) shows: the real innovation is in the mix-ups and mash-ups at the intersection of content and context. Inma and I will integrate her observations and first-hand encounters with entrepreneurs into the next in the Mobile Groove series, so be sure to connect with her during the show. To meet up or catch up, email her directly at imartinez AT stradbrokeadvisors DOTcom.

While I won’t make the trip, I have teamed up with the organizers to promote this and all GigaOM events going forward. All have assembled world class speakers and all will be prominently featured on MSearchGroove. (For example, this week’s conference features keynotes by Sanjay Jha, CEO of Motorola and Cole Brodman, CTO of T-Mobile, presentations that anchor a stellar line up of telecoms and web industry speakers including Andy Rubin, co-Founder of Android and Len Lauer, COO of Qualcomm.) Thanks to Surj Patel MSearchGroove readers can register for a special $100 discount on the ticket price. Please click here to take advantage of this offer (standard: $545), and be sure to enter the discount code: MPSALZ100.

While Inma makes her way to Mobilize, I am gearing up for the Mobile marketing Forum (MMF) Europe in Berlin (September 9-10) -  a Mobile Marketing Association (MMA) event that brings together a who’s who of mobile companies, operators.

In addition to my own one-on-ones and a lunch with Mike Wehrs, MMA President and Chief Executive Officer, I also look forward to conducting industry interviews with long-time MSearchGroove friend and partner bnetTV, the online destination for quality industry news and commentary. (Over the past two years I have worked with the bnetTV team to create some 40 video interviews, segments that I invite you to explore in the bnetTV video jukebox featured in the right-hand sidebar on the homepage.)

The filming schedule is hectic, but exciting (!), and features interviews with senior execs from companies including (in no special order) AdMob, GetJar, AKQA, We Love Mobile, Openwave and Out There Media. We have a super-busy schedule, but some slots are still available, so please contact me directly (peggy ATmsearchgroove DOTcom) to schedule a video interview.

I look forward to seeing you there!

In absolute terms, though, it’s an average of 1 paid app per month on Android, 2.6 paid apps on iPhone and 2.0 on iPod Touch. Broken down into those who “regularly” download paid apps, they tend to download 5 paid apps per month, spending $9.

Another interesting observation from the report is that iPod Touch users download an average total of 18 apps per month – whereas iPhone users grab 10 each month. Source

The bottom line: Apple’s App Store remains the gold standard, demonstrating that consumers will download – and pay for — apps when it’s easy to browse and simple to install. At this point, most of the other app stores out there are poor imitators that don’t pay enough attention to the usability aspects of their offerings and how they integrate into the installation process of compatible devices. Meanwhile, iPhone users are dropping some decent money on paid apps, and creating advertising opportunities with free ones.

***

MOBILE NET ADSPEND TO QUADRUPLE TO $2 BILLION BY 2014, according to Juniper Research. The firm says that mobile internet ad spending worldwide will approach $500 million this year, and almost reach $2 billion by 2014.

This doesn’t even include SMS advertising, which Juniper says will be overtaken by mobile Internet ad spending this year. Overall, total mobile ad spending will hit $1.4 billion this year, and $6 billion in 2014. Source

The bottom line: Over the past several weeks, we’ve seen a lot of predictions like this, highlighting the expected growth in the mobile advertising market. Perhaps the most important thing to takeaway is that these predictions signal the high interest in mobile advertising – but to hit these lofty targets, the entire ecosystem will have to work to deliver the right solutions for brands and consumers.

***

THE U.S. AD MARKET WILL FALL BY $1.6 BILLION THIS YEAR, says the Yankee Group in a new report. Spending on TV advertising will fall by $2 billion alone, the firm says, as budgets shrink and consumers shift to the I nternet on both PC and mobile. Another key factor the report cites is the booming amount of inventory available on these platforms, which it says put constant downward pressure on prices. Source

The bottom line: Like the previous point, there have been several of these reports lately, showing a significant drop in ad spending, but they typically show mobile as one bright spot. Again, the opportunity is there for mobile advertising to grow and take dollars away from other platforms – but only if the ecosystem can deliver the right opportunities.

—–

HARDLY ANYBODY’S WATCHING MOBILE TV, according to a new report from In-Stat (that shouldn’t really surprise anybody in mobile). Despite mobile TV’s failure to live up to the hype that’s surrounded it for several years, the firm says that 54 million people will watch analog free-to-air TV on their mobile this year, reaching 300 million in 2013. That’s an important distinction: in many developed markets, analog TV isn’t available on mobiles, or it’s somewhere in the process of being switched off in favor of digital terrestrial broadcasts. This means that growth will come largely in developing markets.

The report, it should be mentioned, was conducted on behalf of a mobile TV chip company and contains many of the type of stats that other reports about mobile TV have mentioned: those who use it tend to use it several times a week, and spend a decent amount of time watching. But the issue remains that there simply aren’t very many people at all using mobile TV. Source

The bottom line: The report’s author says that free-to-air programming supported by advertising would boost the mobile TV market. That might be true, but the lack of uptake seems to be largely built on a real lack of interest for mobile TV among consumers. Furthermore, if mobile TV accesses freely available signals, cutting the operators out of the picture, they’re unlikely to want to subsidize handsets that would support it.

***

M-COMMERCE IS MOVING SLOWLY, at least in the U.S., says a new report from eMarketer. One survey it cites says retailers say budget constraints are the biggest factor keeping them from expanding their efforts, with consumer apathy apparently not even included in the survey. Another poll in the report says that more than half of U.S. consumers would be willing to buy pizza or movie/event tickets by mobile, with just 34 percent saying they’d buy games and just 24 percent saying they’d purchase mobile video/TV content.

The report talks about one more survey, which says that the most popular form of purchase via mobile among US m-commerce users is, as you’d expect, mobile content. Next, is consumer electronics, which it says has been bought by half the people who have used m-commerce. A small sample size (just 137) could help explain that figure. Source

The bottom line: Perhaps the biggest factor holding back m-commerce is a lack of real demand. For many types of goods, shopping on mobile isn’t a great experience. But for other kinds of products – in particular, services that are consumed on the go like events or travel – some market may emerge.

***

OPERA MINI SEES 25 MILLION DOWNLOADS on GetJar alone, the site says. GetJar says Opera Mini is the most downloaded mobile app of all time, and that it alone has served up 7.5 million downloads of the latest version of the app since the beginning of the year. Source

The bottom line: Two main takeaways here: Opera Mini, as most readers probably already know, is a hugely popular app across multiple platforms and app stores. Second, the smartphone app stores aren’t the only places sending mobile users lots of downloads.

App store frenzy? That’s what comes across when you connect the dots in the raft of recent announcements. Mobile operators ranging from U.S. mobile operator Verizon Wireless (which has borrowed a page from parent company Vodafone to launch a carrier-wide app store based on Java ME that can target more than one device) to China Mobile (which tells TelecomAsia.net that it’s moving full-steam ahead on its Mobile Market app store where it plans to take 50 percent cut of app sales revenues) are jockeying for position and a piece of the action.

Interestingly, much of the operator excitement centers on the new mobile advertising opportunity app stores represent. As Jonathan Kelly, who heads up Vodafone UK Marketing, recently told me in a briefing: “I see some quite interesting opportunities in apps and widgets. A likely scenario could involve a sponsored widget, where the brand actually works with us to create a widget or application that we then prominently place in our app store.”

Beyond that, Jonathan sees other opportunities around actually embedding advertising within a widget. “You could have some sort of utility widget that’s providing weather, and there’s no reason why certain relevant companies may not wish to have some advertising embedded within that.”

At the other end of the spectrum, Apple’s App Store, RIM’s BlackBerry App World and Android’s Marketplace may have been the first to the party, but they have company. The recent JavaOne conference kicked off its annual convention by opening the doors of the Java App Store, a global marketplace for Java apps headed by Sun Microsystems. It comes on the heels of other app store news elsewhere in the industry including Nokia’s launch of the Ovi app store, a storefront offering available in Australia, Singapore, Spain, Italy, Germany, Russia, Ireland and the U.K, offering 20,000 titles (a fraction of which are apps) to an estimated 50 million Nokia devices globally.

Not to be outdone, Sony Ericsson takes the wraps off its new PlayNow Arena, the only player that opts to outsource much of the work to GetJar. The Lithuania-based company is billed as the world’s largest independent app store, with over 450 million mobile application downloads to date in more than 200 countries, will take on the mammoth task of managing and stocking the app store’s virtual shelves. The takeaway: make way for more companies and models.

An interesting newcomer that merits a closer look is WeFi.

This community-based WiFi network provider that has a new twist on the app storefront strategy that covers the bases to place it (and companies like it) firmly in the emerging app store ecosystem. Its blog outlines the quiet but clever launch of a combination “Wi-Fi powered launch-pad” and applications portal called WeFiApps, an app store offering a range of apps (communication services, entertainment, and information) in partnership with companies/providers including Fring, joiku, Nimbuzz, IM+ from Shape Services, VuFone from NewAct and Hollywood Star from HOVR. These apps (a combination of free and paid) are currently accessible on any WiFi-enabled Symbian S60 mobile phone.

CHALLENGES & OPPORTUNITIES

Is the flurry of excitement and activity around app stores a sign that we are entering into a new era of innovation and market opportunity?

Or should we worry that it’s the walled garden scenario all over again? This well-written opinion piece from Knowledge @ Wharton suggests the tight integration between mobile networks, device manufacturers and operating systems vendors limits our choices. It asks us to think through a case in which the new Palm Pre has a must-have app. In this scenario iPhone users in the U.S. who want it would have to switch devices (from iPhone to Pre) and mobile operators (from AT&T, Apple’s only provider to Palm’s partner Sprint).

The role of the operator amid this fragmentation and confusion remains unclear. However, it is clear that the majority of mobile operators want to stake their turf in this new services creation environment, a position they will cement by offering an app store-like offering or simply by opening up their APIs to enrich or enhance services offered by third-party developers.

How big could the market be? The jury is out on that one, but a recent survey from Airwide Solutions, a provider of mobile messaging and wireless Internet infrastructure, applications and solutions, found mobile operators expect significant growth in apps downloads within the next two years. The methodology was a bit fuzzy and percentages were diverse, but on average, operators said they expected 18.3 percent of the customers to be downloading apps within an average timeframe of 2.9 years. Overall some 43 percent of operators expect 20 percent of their customer base to download apps by 2011.

USER EXPERIENCE & SERIOUS SHORTCOMINGS

App stores schemes from handset manufacturers and mobile operators alike increase our demand for centralized solutions, one-stop-shops where we can find and buy the apps we want.

But how do these virtual shops really stack up? Alfred DeRose, Co-founder & Managing Director of Tego Interactive, a Web and mobile product and services company providing development and integrated solutions for the needs of major brands, content publishers and mobile network operators, recently conducted an informal road test of Ovi and documented his experience in his blog.

The process users follow to purchase an app from Ovi (excerpted from Alfred’s blog):

1. Select the item you want to purchase.
2. Select Buy .
3. Enter your Nokia account user name and password. If you do not have an account, select Create a Nokia account, and enter the required information.
4. Select to pay using your credit card or through your phone bill. If you already have your credit card information stored in your Nokia account, and you want to use another credit card, select Edit payment settings, and enter the required information. To save your credit card information to your Nokia account, select the Save this card to my Nokia account check box.
5. Select the e-mail address to which you want to receive a receipt of your purchase.
6. Select Purchase

While Nokia made a wise choice not to duplicate the one-click payment model from Apple that has effectively disintermediated operators from the app value chain, the process is tedious and complicated, hardly the user experience that encourages the all-important impulse buy. As Alfred puts it: “The best content will sit on the virtual shelves unless the buying process is clean and simple.”

Another prerequisite he highlights is the critical need for quality content discovery tools.

With an abundance of mobile apps at their finger tips, people certainly can’t claim they offer a lack of choice. But they can complain about the tedious navigation process and confusing hierarchical menus they must endure to find and buy content they like. If operators, providers, developers and handset makers want to sell more mobile content, then they are going to have to harness technologies and techniques to help users discover the content they want.

Put another way, it’s Retail 101 all over again, and the advance of app store schemes turns up the pressure on the emerging business ecosystem to remove the pain from the content discovery process and provide users with what they want – and perhaps even before those users know they need it in the first place.

The takeaway: Amid the activity and excitement that marks the emergence of a plethora of app store offers and schemes, many companies have lost the plot. It’s not about how many there are or who operates them. It’s about making finding and buying apps a no-brainer. The players in a position to give people the apps they want (allowing developers to rise above the noise and make money in the process) will be among the leaders not the also-rans.

(NOTE: I am proud to announce that Alfred DeRose has joined our roster of authors and influencers contributing news, analysis and thought leadership to MSG. He will focus on issues and solutions related to design, usability, mobile advertising and content discovery. You can reach him at alfred.derose@tegointeractive.com .)

Disclaimer: Tego Interactive is an MSG supporter.

Meanwhile, GetJar, which runs an independent, multi-platform app download site, says it, too, has seen more than 1.5 billion downloads of the 50,000 apps it carries. It says the five most popular apps are Opera Mini; three mobile social networking apps, eBuddy, Nimbuzz and mig33; and Google Maps. Source

The Bottom Line: The attraction of app downloads rolls on, and not just for iPhone users. One question, though: how many of those 1.5 billion apps on iPhones get actively used? Still, in some sense, it’s not that important. The big download figures show what mobile users will do when the browsing, download and installation process is quick and simple – something that can’t be said about many previous attempts at app stores on other platforms.

***

INSIGHTS ON MOBILE DATA USAGE. Peggy has passed over some stats from Comscore from the Open Mobile Summit, a top-notch conference and networking opportunity that MSearchGroove is proud to sponsor as a media partner. In fact, MSG will be a sponsor and speaker at the next Open Mobile Summit in November in San Francisco – but more about that later. The figures show some interesting points about mobile media usage, including that a higher percentage of US mobile users are mobile media users (meaning they use browsers or apps, or download media) than Europeans, at 35 percent to 28 percent.

Also, an interesting figure on UK mobile browsing habits: 74 percent of mobile browsers in the UK hit operator portals, but those portals only account for 12.4 percent of all pages viewed. This shows that users are comfortable going off-deck to find the content they want, like Facebook, which alone generates 23 percent of all the mobile page views. Facebook and the other top 20 destinations account for 67 percent of the pages viewed, though Comscore measured 167,000 sites.

Comscore also reports that mobile banner ads continue to be dominated by ads for mobile products. 65 percent of mobile banners in the US are for mobile products, while the figure jumps to 85 percent in the UK.

The Bottom Line: There has been plenty of evidence to document the growth in mobile web use, but these stats illustrate that it’s definitely coming from off-deck sites, at least in the UK. Facebook continually emerges as a top mobile web destination, revealing the desire for mobile users to stay connected to their social networks while they’re away from their PCs.

***

ENTERTAINMENT COMPANIES TOP MOBILE ADVERTISERS LIST, according to mobile ad provider Millenial Media. The company has released a report of the top ten industries that are using mobile advertising – excluding mobile apps, ringtones and other downloads, which the previous data point suggests makes up the bulk of the market. Movie, TV, music and video game companies topped the list, followed by telecom companies, “portals”, dating services, retailers, consumer packaged goods companies, the automotive industry, the armed forces, education and travel companies. Source

The Bottom Line: These sorts of stats will likely vary widely based on the ad provider’s network of sites, and other factors, though they do illustrate the breadth of companies that are using mobile advertising. Still, taken in concert with the previous data point, it looks like ads for mobile services and downloads dominate.

***

FACEBOOK, TWITTER TOPS AMONG YOUNG BRITISH MOBILE WEB USERS, says a new report from CCS Insight. A survey of more than 1,000 people between 16 and 35 in the UK revealed that more than a third of them regularly access Twitter and/or Facebook from their mobile device. It also found that men are twice as likely to access the mobile web as women, and that young people expect mobile content to be free. Source

The Bottom Line: Again, Facebook’s name pops up as one of the most popular mobile web destinations. That’s not surprising, but the difference in use between women and men is, at least in terms of the size of the gap. This highlights an area in which operators, content providers and handset vendors could do more.

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WHAT DO US CONSUMERS REALLY WANT IN THEIR MOBILE PHONES? A new study from online retailer Wirefly says that US consumers are most interested in basic factors when making a handset purchase, such as size and color, with almost two-thirds saying they were more concerned with these aspects than the high-tech features of a phone. Source

Meanwhile a separate survey from Data Development Worldwide found that 40 percent of US shoppers looking to make a mobile device purchase in the next three months wanted a single device that could handle a variety of tasks, such as a smartphone or netbook.

The Bottom Line: It’s hard to take much away from either one of these surveys, really, apart from a confirmation of the old adage, “different strokes for different folks.” Physical form factors obviously remain very important, but so too is functionality. Witness the reaction this week to the Nokia Surge, a social-networking-centric device that’s being launched on AT&T. Much of the online reaction was to call the device ugly, but its design stems from AT&T’s desire to sell more low-end QWERTY devices – a desire borne out of consumer demand for such devices that can make texting and emailing easier.

ALMOST HALF OF MOBILE DOWNLOADERS GRAB APPS MORE THAN ONCE A WEEK, according to some research from GetJar.com, a cross-platform app store. GetJar’s users are an active bunch: 15 percent download once a week, and another 10 percent do it several times a month. About a third of the 5,000 respondents in the survey say they download because they always have their phone with them, while 28 percent do it to pass the time.

A third of those surveyed say they use apps while they’re commuting or on public transport, and perhaps a little surprisingly, 27 percent say they use them at home – though this follows earlier research on mobile TV usage, which found that many subscribers also used it quite often at home as a second or personal screen. Source

The Bottom Line: GetJar has been around for several years, and is the largest independent source of mobile app downloads in the world, so its data can be quite useful to get an idea of what users of devices other than the usual smartphone suspects are doing. These figures show that it’s not just iPhone users who have a voracious appetite for apps – a point that’s often missed by many.

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ONE OF EVERY 7 MINUTES OF US MEDIA CONSUMPTION NOW COMES FROM MOBILE, according to new research from ad agency Universal McCann and AOL. They also report that 80 percent of US smartphone users are satisfied with the quality of the internet service on their mobile device. Almost 40 percent said they’d taken action based on mobile ads, and 22 percent said a mobile ad had influenced a purchase decision they made. Still, reach remains something of an issue: the survey says there are 63 million mobile web users in the US, with 19 million of them accessing the mobile web on a weekly basis. Source

The Bottom Line: More evidence that mobile is already an established part of the media landscape, and one to which marketers need to be paying attention. Furthermore, the survey highlights the viability of mobile ads and their ability to influence viewers.

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MOBILE DISPLAY ADS INCREASE BRAND AWARENESS AND RECOGNITION, says the IAB UK, based on research by Brand Driver using banner ads for Kit Kat candy. The group says that being exposed to mobile banner ads significantly raised spontaneous and first-mention awareness of Kit Kat, and was particularly effective at doing so among 18- to 34-year-olds. It also says that incentives are important to mobile ad viewers, with 51 percent in the survey saying they were more likely to interact with a mobile ad that offers something to them in return. Meanwhile, creative is also important, as 41 percent says they clicked through just because they were interested in a particular ad. Source

The Bottom Line: Taken in concert with the above data from the US, once again this research reinforces the utility and ability of mobile advertising to effectively engage audiences. The ability to incentivize advertising also gives mobile a leg up, by making it easier for marketers to offer something in return, such as free downloads or the chance to enter a competition, as Kit Kat did here.

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SALES OF LOW-COST HANDSETS AND OPEN-SOURCE OS SMARTPHONES ON THE RISE, says Juniper Research. The company predicts that annual sales of low-cost handsets will rise 22% through 2014, to over 700 million, as growth in emerging markets continues for mobile operators. Meanwhile, it separately predicts that the number of smartphones running open-source operating systems (such as Symbian and Android) will grow from 106 million this year, to 223 million in 2014. Source

The Bottom Line: Emerging markets continue to be a strong growth area for the mobile industry, and content providers should keep them on their radar. Meanwhile, the diversity of smartphone operating systems isn’t going away, meaning developers will still need to deal with the hassle of fragmentation to hit their target markets.

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MOBILE MORE IMPORTANT THAN PCS FOR YOUNG AMERICAN WOMEN, according to research from SRG. Its recent Women and Digital Life Study found that women under 25 spend twice as much time – 2.8 hours per day – on their phones, compared to the 1.2 hours per day for women over 40. The young women spend slightly more time on their PCs (2.9 hours) than their mobiles, whereas older women spend significantly more, 3.5 hours per day. Unsurprisingly, the study found that younger women also used more features of their mobile more often than older women. Source

The Bottom Line: It shouldn’t be too surprising to discover young people using their mobiles more frequently and for more activities than older users, but perhaps the biggest takeaway here is the length of use figures for PC vs. Mobile. They’re essentially equal for young women, showing that mobile can be just as viable a way to reach young women as the web via PC.

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MOBILE M&A ACTIVITY STANDS OUT, while much of the rest of the market is quiet, says The Jordan, Edmiston Group. The company tracks merger and acquisition activity in the media, information, marketing services and technology sectors, and says 171 deals worth a collective $4.1 billion were done in Q2. While activity is still down significantly over previous years, the company says it has seen an uptick in recent weeks, and that mobile remains something of a bright spot. Activity in the Mobile Media & Technology sector was up 46 percent in the first half of 2009 over the previous year. Source (PDF)

The Bottom Line: Like many other corporate transactions, M&A activity remains low given economic factors. But mobile is still a hot area, and one that’s widely tipped to outpace many other technology sectors in the short to medium term. Still, it’s a buyer’s market, at least for those with access to capital, particularly as many startups and smaller players struggle to find the funding they need to keep going, and keep growing.

How viable is mobile advertising in an economic slowdown? How will the current economy impact businesses that derive revenues from mobile advertising? Can mobile advertising count on VC funding?

These were just a few of the key questions that thought leaders, startups, investors, mobile carriers, device manufacturers, and mobile application developers debated during Mobile 2.0 in San Francisco.

The mobile conference – organized by the Mobile 2.0 Organizing Committee ( Daniel Appelquist, Senior Technology Strategist at Vodafone Group; Gregory Gorman, Principal at Tertius Advisory Services; Mike Rowehl, Scalability Architect at Skyfire; Peter Vesterbacka, Founder Some Bazaar and Mobile Monday and Rudy De Waele, Co-founder dotopen / mTrends) in partnership with AMF Ventures – brought together a stellar line-up of professionals and practitioners in a frank (translated: no-hype) one-day discussion of the topics and trends that matter.

The most dominant theme: The economy. Or more specifically: How companies can survive in the global downturn that is already impacting businesses at every level.

Overall, attendees were upbeat about the outlook for mobile advertising. But this was more than a hunch.

New numbers from mobile social networking company Limbo and GfK Technology, a market research firm, underlined the increasing importance (and reach) of mobile advertising in the U.S. market. A recent study from these firms found that 40 percent of mobile phone users in the U.S., about 100 million people, recalled seeing an advertisement on their phone during 3Q08 (about two-thirds of the ads were text messages; the other one-third were display ads). It was the first time mobile advertising awareness in the U.S. reached such a level during a single quarter, and it represents a sure sign that mobile advertising is getting the attention of brands/advertisers despite the economic downturn.

More evidence that advertising is indeed delivering positive results came from Brian Cowley, president and CEO of AdInfuse; Jason Spero, vice president of marketing at AdMob; and Ragnar Kruse, CEO and founder of Smaato.

Each reported that they are seeing continued and strong interest in mobile advertising, and each backed this up with some interesting observations. Jason, for example, told us that AdMob has not seen a drop in mobile advertising budgets among its partners. To the contrary, companies are asking for more ad placement and increasing their budget with AdMob. This view was echoed by Brian at AdInfuse, who said his company has never seen more interest in advertising by top brands than it is seeing today.

A driver is the consumer expectation that content must be and will remain free of charge – subsidized by advertising. Granted, there are many examples of companies making money on content and apps – such as Apple, which has built a lucrative business by selling applications via its App Store, and Google, which follows the same blueprint with its new Android Market. However, executives from GetJar and MySpace asserted at the conference that in most contexts, the most scalable and sustainable business model is just giving away mobile apps for free.

Don’t count on distribution via carrier decks,  because it is hard to get in the door with operators and it does not guarantee a worthwhile income. This was the view of Ilja Laurs, the founder of GetJar. His company, widely considered to be the world’s largest mobile applications portal, has harnessed mobile advertising to fund the successful distribution of free apps on behalf of its developer partners.

Consumers are also not willing to pay to join or interact in mobile social networks. Brandon Lucas, senior director of mobile business development at MySpace, pointed out that consumers’ unwillingness to pay a monthly fee for mobile MySpace services has pushed his company to phase out its premium-based mobile services. The focus is now on moving to a pure ad-funded model.

For many mobile companies, mobile advertising works. But will it pay? This was the question that made for a lively discussion during the VC panel. Their view: Companies that are not dominant in their sectors may find it hard to succeed with an advertising model, and those that are trying to get off the ground with this approach are likely to face an uphill battle.

Tim Chang, a partner at Norwest Venture Partners; Peter Barry, head of venture capital and startups for Vodafone Group; and Rick Segal, a partner at JLA Ventures and Blackberry Partners Fund, agreed that VC firms are not dazzled by mobile app and services startups that depend on ads for revenue. The reason: A startup has to reach a lot of eyeballs, and the market is chock-full of companies that have bet their bottom lines on this approach.

In a nutshell, only a few of these mobile newcomers can hope to survive – and that isn’t a risk many VCs are willing to take.

What excites VCs? Companies that provide the infrastructure and middleware to deliver mobile advertising or reduce the costs associated with it are hot properties now. AdMob, which recently pulled in $15.7 million in its third round of funding, was cited as an example of a desirable mobile advertising investment.

Mobile advertising experts at the event also expressed strong interest in companies that collect and wield customer data (all the better if they do it in new and innovative ways). This new focus makes business sense if we consider the underlying logic: The more data an application can generate about users, the more advertising it will attract and, ultimately, funding. It’s a virtuous cycle. Likewise, companies that can develop infrastructure and techniques that will bring in more metadata and metrics via mobile applications are also high on the radar.